Property

In 2025, the Korean property insurance market operated in a challenging environment characterized by negative premium growth and a significant deterioration in underwriting performance. On a year-to-date basis through November, gross written premiums declined by 3.6% year on year to KRW 2,633 billion, primarily due to intensified competition for market share. By line of business, fire insurance premiums decreased by 2.0% to KRW 308 billion, while comprehensive insurance premiums fell by 3.8% to KRW 2,325 billion. The market loss ratio rose sharply from 29.8% to 75.5%, mainly driven by large individual loss events, most notably the Kumho Tire fire.

Treaty Business

We maintain private treaty relationships with 14 primary insurers. In 2025, premium income from these treaties increased by 6.0% year on year to KRW 191 billion. In terms of portfolio composition, Korean Re rate-based contracts account for approximately 14% of our domestic property treaty portfolio while the remaining 86% comprises predominantly tariff-based contracts.

Since 2023, we have made continuous efforts to improve the profitability of our inward treaty portfolio. To mitigate adverse selection by primary insurers, we narrowed the cession ranges of  variable quota share treaties or converted them into pure quota share structures. In addition, we reduced commission rates and introduced Loss Participation Clauses (LPCs), which have been consistently maintained to ensure the stability of treaty performance.

In 2026, we will continue to prioritize profitable growth while maintaining robust performance protection measures, including low minimum commission levels and LPC structures.

Facultative Business

Korean Re’s facultative strategy has focused on underwriting mega-sized accounts – defined as those with total sums insured (TSI) exceeding KRW 1 trillion – which provide reinsurers with more stable payback opportunities compared to small and medium-sized (SME) accounts, where primary insurers can exercise greater pricing discretion. This strategic focus reflects heightened competition in SME accounts following the adoption of judgment rates in 2019. As a result, our facultative portfolio is currently composed of approximately 80% mega-sized accounts and 20% SME accounts. We will continue to selectively underwrite SME accounts that demonstrate stable performance with adequate pricing.

Amid ongoing market softening and intensified competition in the primary market, we remained committed to disciplined underwriting and prudent business selection. Despite the Kumho Tire loss, we achieved a combined ratio of 58% in 2025, reflecting sound underwriting performance.

At the same time, we actively expanded our KIA portfolio by capitalizing on growing demand driven by Korean conglomerates’ increasing overseas investments, particularly in North America. As a result, written premiums from KIA accounts grew by 13% to KRW 142 billion in spite of the challenging market environment. However, due to weaker domestic market conditions, total facultative premiums declined by 6% year on year to KRW 429 billion.

In 2026, the domestic property insurance market is expected to remain soft, driven by an influx of overseas reinsurance capacity. While maintaining a profitability-focused underwriting stance in our facultative business, we will pursue growth by capitalizing on rising KIA demand generated by Korean conglomerates’ expanding overseas investments.